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Consolidated Answer, Testimony, and Rebuttal Exhibits
of American Airlines in Support of
American Airlines U.S.-Cuba Scheduled Service
Docket DOT-OST-2016-0021
March 14, 2016
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CONTENTS
Consolidated Answer of American Airlines, Inc.
Supporting Testimony from Tessie Aral, President of ABC Charters, Inc.
Letter of Support from Mike Fernandez, Chairman of MBF Healthcare Partners, L.P.
Rebuttal Exhibits
• Section 1: General Overview
• Section 2: American’s Request
• Section 3: Gateway Comparisons
• Section 4: Rebuttal to JetBlue
• Section 5: Rebuttal to Southwest
• Section 6: Rebuttal to Delta
• Section 7: Rebuttal to Frontier
• Section 8: Rebuttal to Spirit
• Section 9: Rebuttal to United
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BEFORE THEU.S. DEPARTMENT OF TRANSPORTATION
WASHINGTON, D.C.
____________________________________)
Application of ))
AMERICAN AIRLINES, INC. ) Docket DOT-OST-2016-0021
)in the matter of 2016 U.S.-Cuba Frequency )Allocation Proceeding ) ____________________________________)
CONSOLIDATED ANSWER OF AMERICAN AIRLINES, INC.
Communications with respect to this document should be addressed to:
Howard KassVice PresidentRegulatory Affairs
Robert A. WirickManaging Director
Regulatory and International Affairs
J h B Willi
Paul T. DenisSteven G. BradburyWilliam B. Sohn
DECHERT LLP1900 K Street NW
Washington, D.C. 20006(202) 261-3300
l d i @d h t
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TABLE OF CONTENTS
Executive Summary ...................................................................................................................... 1
Discussion....................................................................................................................................... 4
I. The Applications of Other Carriers Confirm that MIA is the Necessary
Starting Point for Successfully Restoring and Growing U.S.-Cuba Scheduled
Service ................................................................................................................................ 4
II. American’s Proposed Schedule Offers the Strongest Foundation for Service
from MIA, While Providing Sufficient Frequencies for Scheduled Service to
and Through Other Connecting Hubs ............................................................................ 6
A.
Demographic and Charter Traffic Data Conclusively Demonstrate that
MIA Deserves No Less than the Ten Daily MIA-HAV Frequencies
Proposed by American ........................................................................................... 6
B. Awarding American Ten Daily MIA-HAV Frequencies Leaves Ample Frequencies for Fulfilling Other Objectives ......................................................... 8
C. Only American’s Proposed Service from MIA Maximizes Public Benefits ........ 9
III. MIA Is Superior to FLL for Serving the Miami-Centered Cuban-American
Community in South Florida ......................................................................................... 11
A. MIA Has Long Been the Preferred Airport for U.S.-Cuba Service ................... 12
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E. Application of Spirit Airlines, Inc. ...................................................................... 25
F.
Application of United Airlines, Inc. .................................................................... 25
G.
Application of Alaska Airlines, Inc. .................................................................... 26
H.
Application of Sun Country Airlines ................................................................... 26
I.
Application of Federal Express Corp. ................................................................. 27
J.
Application of Dynamic International Airways, LLC ........................................ 27
K. Application Eastern Air Lines Group, Inc. ......................................................... 28
L. Application of Silver Airways Corp. .................................................................... 29
Conclusion ................................................................................................................................... 29
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BEFORE THE
U.S. DEPARTMENT OF TRANSPORTATION
WASHINGTON, D.C.
____________________________________)
Application of ))
AMERICAN AIRLINES, INC. ) Docket DOT-OST-2016-0021
)in the matter of 2016 U.S.-Cuba Frequency )Allocation Proceeding ) ____________________________________)
CONSOLIDATED ANSWER OF AMERICAN AIRLINES, INC.
American Airlines, Inc. (“American”) submits the following Consolidated Answer in
response to the Applications of Alaska Airlines, Inc. (“Alaska”), Delta Air Lines, Inc. (“Delta”),
Dynamic International Airways, LLC (“Dynamic”), Eastern Air Lines Group, Inc. (“Eastern”),
Federal Express Corp. (“FedEx”), Frontier Airlines, Inc. (“Frontier”), JetBlue Airways Corp.
(“JetBlue”), Silver Airways Corp. (“Silver”), Southwest Airlines Co. (“Southwest”), Spirit
Ai li I (“S i it”) S C t Ai li (“S C t ”) d U it d Ai li I
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The applications filed do not dispute that the greatest demand for U.S.-Cuba travel comes
from the Miami-Dade Cuban-American community, and this supports the fundamental premises
of American’s proposed schedule:
• The largest share of scheduled frequencies to Havana (“HAV”) should be
allocated to American’s flights out of MIA, in order to match the
availability of scheduled passenger service to the existing demand for
HAV service at MIA.
• The success of the Administration’s objective of promoting U.S.-Cuba
engagement depends on the allocated frequencies’ being concentrated
where demand and traffic currently exist, and no airline has proposed an
allocation more tailored to demand and traffic than American.
American is the only airline to propose sufficient frequencies to meet the anticipated near-term
growth in demand for U.S.-Cuba travel by the Miami-Dade Cuban-American community—
nearly half the Cuban-American population of the entire United States. And American’s
proposed schedule is the only proposal that will fully satisfy the Administration’s objective
underlying this proceeding.
First, American’s proposed service lays the strongest foundation for connecting the
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throughout Miami-Dade County, its experience with Cuba, and its network of connections to
Cuba through MIA.
Second , the excessive frequencies requested to Cuba from Fort Lauderdale (“FLL”) do
not meet the needs of Miami-Dade Cuban Americans. These proposals are based on the premise
that hundreds of thousands of Cuban Americans living in Miami-Dade County should be
inconvenienced by having to travel to Broward County for scheduled service to Cuba. Decades
of experience with U.S.-Cuba charter flights establishes beyond doubt that these passengers
prefer MIA, as the president of one of the largest U.S-Cuba charter companies has testified. AA-
R-T-1. There has never been more than one or two weekly charter flights from FLL to anywhere
in Cuba, and there is no basis to assume that multiple daily scheduled frequencies to HAV at
FLL will create demand where very little has ever existed.
Third , the volume of daily frequencies proposed to HAV from other Florida airports far
surpasses any realistic level of demand. These airports, including Tampa (“TPA”) and Orlando
(“MCO”), serve minimal local demand and offer almost no connectivity. Were the overall
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frequencies to match anticipated traffic and demand. These considerations compel the award of
American’s proposed frequencies.
Discussion
I. The Applications of Other Carriers Confirm that MIA is the Necessary Starting
Point for Successfully Restoring and Growing U.S.-Cuba Scheduled Service
This route allocation proceeding is the most contested case in the Department’s history.
The thirteen applicants here far exceed the number of applicants in any other case before the
Department, and combined they have requested 397 weekly frequencies from the United States
to Havana, when just 140 are available.1 Despite this fierce competition for these limited
resources, however, the applicants have reached a remarkable consensus on the realities of U.S.-
Cuba travel that must govern the allocation. The applicants generally agree that:
• U.S.-Cuba traffic will largely be limited to those visiting family and relatives in Cu ba,and to those traveling for other reasons permissible under current OFAC sanctions.2
• Tourism has no place in this pr oceeding, because tourism-related travel to Cuba
remains prohibited under U.S. law.
3
• The demand for U.S.-Cuba travel will therefore be strongest in Miami-Dade County,4
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These realities all support American’s proposed schedule. As U.S. Senator Jeff Flake (R-
AZ) recently explained on the Senate floor, U.S.-Cuba scheduled service “should include
adequate regular service to accommodate the growing demand from the largest and closet
Cuban-American population located in Miami-Dade County.”6 Prominent members of the
Miami-Dade Cuban-American community, including Mike Fernandez, the Chairman of MBF
Healthcare Partners, agree with the Senator’s observation.7 Family, cultural, and commercial
ties with Cuba are the strongest in Miami-Dade County, and American’s ten requested MIA-
HAV frequencies are firmly supported by the factors most indicative of near-term demand for
U.S.-Cuba travel:
• Nearly half the Cuban-American population resides in Miami-Dade County. Based
on the size and location of the Cuban-American population near MIA, MIA wouldreceive more than half of the frequencies were this allocation made purely on thedistribution of Cuban Americans among the population centers served by the airportsfor which applicants have requested U.S.-Cuba frequencies. Ex. AA-R-107.
• Nearly 84 percent of all charter flights between the U.S. and HAV in 2015 originated
from MIA—almost 11 times more than from the next U.S. airport. Ex. AA-R-111.
Indeed, other applicants have requested MIA-HAV frequencies despite having a minimal
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II. American’s Proposed Schedule Offers the Strongest Foundation for Service from
MIA, While Providing Sufficient Frequencies for Scheduled Service to and Through
Other Connecting Hubs
American’s proposed schedule is the only proposal that meets the needs of the Miami-
Dade Cuban-American community. This community requires the ten daily MIA-HAV
frequencies proposed by American, which matches current demand and anticipated near-term
growth.8 Anything less than ten daily MIA-HAV frequencies leaves a shortage of seats for the
residents of Miami-Dade County, and falls short of the Department’s long-standing practice of
allocating scarce resources in a manner that best suits the overall needs of the traveling public.
Failing to meet the needs of Miami-Dade would seriously undermine the President’s and,
necessarily, the Department’s policy towards Cuba. The Miami-Dade Cuban-American
community is at the core of renewed U.S.-Cuba engagement, and any barrier to its ability to
enjoy adequate scheduled service to Cuba from MIA threatens the Administration’s broader
goals. American’s unparalleled presence and commitment to both MIA and Cuba enable it to
provide superior service for linking MIA with Cuba, and its extensive network from MIA
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contrast to American’s demand-matched proposal from MIA, the other applicants’ proposed
schedules are largely out of sync with these metrics. Figure 1 below shows how an allocation of
frequencies to HAV would look if it were based on the distribution of the Cuban-American
population at each of the population centers served by the airports for which applicants have
requested frequencies, and then compares that allocation to the frequencies actually requested by
applicants at those airports.
Figure 1: All Requested HAV Frequencies Compared to an Allocation Based on
Local Cuban-American Population (Ex. AA-R-107)
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Atlanta (“ATL”), Dallas/Fort-Worth (“DFW”), and Chicago (“ORD”), which are well situated
and have routes and connectivity to serve communities and businesses with Cuban ties across the
United States. Indeed, American’s proposed scheduled service from CLT and DFW would
connect more than 70 cities not connected through MIA with Cuba, providing blanket coverage
throughout the United States. Ex. AA-R-206, 207. American’s proposal also allows the
Department to allocate sufficient frequencies to serve other Cuban-American population
centers.10
But the Department has little room to spare, and the proposed daily frequencies to HAV
not justified by demand and/or connectivity cannot be awarded without (a) denying MIA the
necessary frequencies and thereby harming those who most demand travel to Cuba, or (b)
leaving the Department with insufficient frequencies to fulfill the objectives described above.
The requests by other applicants for these scarce frequencies are simply not justified by current
demand, and are merely aspirational at this point. Perhaps these requests can be fulfilled in the
future as the U.S.-Cuba aviation market evolves. The Department must ensure the needs of the
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sustainable. The service proposed by Eastern and Frontier also contains deficiencies that should
be disqualifying. These flaws are described below:
Delta: There is no basis to assume Delta will adequately serve the Miami market. Delta
has no hub at MIA, its frequent flyer membership in Miami-Dade County is minimal, and it
carried far fewer passengers than American from MIA in 2015. Ex. AA-R-605. Moreover,
Delta only connects two cities in both directions with Cuba via MIA. Ex. AA-R-605. There is
good reason to believe Delta cannot successfully operate an international flight from MIA.
Thinking it could, Delta inaugurated MIA-LHR nonstop service in March 2011, and the service
was terminated in April 2012, barely more than a year later. Ex. AA-R-606. Delta’s failure
suggests the Department should exercise caution before allowing Delta to experiment with such
scarce resources as the HAV frequencies.
Frontier: There are at least two reasons to reject Frontier’s proposed MIA-HAV service.
First, Frontier’s first two MIA-HAV frequencies are linked to Frontier also receiving a frequency
between Denver (“DEN”) and HAV, and there is no basis for the Department to award nonstop
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The public benefits created by these applicants’ proposed MIA frequencies are illusory,
in contrast to the benefits created by American’s proposal. American’s proposed service
connects 50 U.S. cities (and 7 other cities in Canada and Europe) with Cuba through MIA, ex.
AA-R-207, and it builds on a history of service to HAV that includes more than 600 charter
flights between the U.S. and HAV in 2015 alone. Ex. AA-R-219. American’s unrivaled
experience of 25 years with Cuban ground operations, other unique local conditions, and aviation
authorities will enable it to “offer and maintain the best service for the traveling and shipping
public.” Instituting Order at 2. From its hub at MIA, American will offer the best service to the
Miami-Dade Cuban-American community, while connecting those with Cuban ties across the
United States to the island nation.
The Administration’s objectives are too important to rely on airlines with little Miami
presence and no appropriate experience to provide consistent, reliable service to link the Miami-
Dade Cuban-American population with Cuba. The public benefits at stake here go well beyond
parochial aviation interests. Should the Department disperse MIA-HAV frequencies among
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to maximize passenger inconvenience, and one believes in a “build it and they will come”
philosophy.
The applicants requesting multiple daily frequencies from FLL ignore demographics and
the demand for U.S.-Cuba travel shown by charter flight data, which demonstrates that Cuban
Americans in the Miami area prefer MIA over FLL. The Cuban-American population is not
evenly distributed throughout the region of “South Florida”11 —an area 110 miles long. Instead,
the Cuban-American population in South Florida is concentrated in Miami-Dade County and
particularly in several communities surrounding MIA. Tellingly, if there is in fact demand from
FLL, then any (or all) of the applicants now touting FLL would have met that demand by flying
charters as, notably, JetBlue has done at TPA and JFK. FLL has never supported even one daily
charter flight to Cuba, ex. AA-R-404, and the Department should decline the invitation to award
FLL so many scheduled frequencies utterly disconnected from actual demand.
A.
MIA Has Long Been the Preferred Airport for U.S.-Cuba Service
Those providing U.S.-Cuba charter service strongly favor MIA over FLL, and that has
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Also, review of the requests for authorization to land elsewhere than at Ft.Lauderdale reveals that most of the requests are to use Miami International
Airport. This is apparently because most airlines willing to offer services to andfrom Cuba are based in Miami and their passengers, in most cases, are Cubanresident aliens or U.S. citizens of Cuban birth living in Miami. When an aircraftflies into or out of Ft. Lauderdale-Hollywood International Airport instead ofMiami International Airport, it increases the cost for all involved parties.13
The same reality still holds today, if not more so. U.S.-Cuba flights from FLL have been
authorized since 2011, yet the charter flight data from 2015 shows a stark preference among
airlines for MIA:
• 2,918 HAV-bound charter flights (83.3% of all U.S. flights to HAV) originated from
MIA in 2015. Just 69 (2.0%) originated from FLL. Put another way, 42 times asmany HAV-bound flights originated from MIA as from FLL. Ex. AA-R-202, 407.
•
The average number of HAV-bound flights in 2015 was more than seven per day from MIA, and less than two per week from FLL.
• There were 1,430 flights fr om MIA to non-Havana Cuba destinations in 2015. FromFLL, there was only one.14
Comparing the total requested frequencies to HAV from MIA and FLL, to an allocation
keyed to the proportion of charter flights flown to HAV from both airports in 2015, shows just
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Figure 3: All MIA-HAV and FLL-HAV Frequencies Requested Compared to an
Allocation Based on 2015 U.S.-Cuba Charter Flights
This is undoubtedly the result of demographics. Figure 4 below, which compares the
total requested frequencies to HAV from MIA and FLL to an allocation keyed to the Cuban-
American population surrounding each airport looks remarkably similar:
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Figure 4: All MIA-HAV and FLL-HAV Frequencies Requested Compared to an
Allocation Based on Local Cuban-American Population
The concentration of Cuban Americans near MIA plainly matters. The resumption of U.S.-Cuba
scheduled service cannot change this demographic reality, and it would only inconvenience
passengers and diminish public benefits to award excessive frequencies to FLL
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The Cuban Americans in these communities are much better served from MIA than from FLL.
The two airports cannot be considered equals for the surrounding Cuban-American communities.
These practical realities make travel to FLL undesirable for U.S.-Cuba travel, as Tessie Aral, the
President of one of the largest providers of U.S.-Cuba charter flights, explains in her testimony.
Ex. AA-R-T-1.
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The requests by JetBlue, Southwest, and Spirit for a combined 12 daily frequencies
between FLL and HAV are therefore meritless. The alleged advantages of FLL over MIA touted
by these carriers fall away when experience demonstrates that the hundreds of thousands of
Cuban Americans living near MIA do not drive to FLL for flights to Cuba. In contrast to the
numerous daily flights to Cuba from MIA operated by American, JetBlue currently operates just
one weekly Cuba-bound flight from FLL, ex. AA-R-404, 407, and Southwest and Spirit operate
exactly zero. None of these airlines offers any practical explanation or plans to support multiple
daily FLL-HAV frequencies when there has never been anywhere near that level of demand for
Cuba-bound charter flights from FLL.16 The absence of any evidentiary support should be fatal
to these applications.
Treating MIA and FLL as fungible for U.S.-Cuba flights defies decades of experience,
and the Department should not award an allocation of Cuba frequencies to FLL so out of line
with current demand. American’s service proposal leaves adequate frequencies to serve the
actual modest demand from FLL. But any such frequencies certainly should not be awarded in
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scheduled frequency to HAV. Ex. AA-R-427. In light of all the requested frequencies given
priority over TPA-HAV, this frequency may not be merited now.
B.
No Other Florida Airport Should Receive Scheduled Frequencies to HAV at the
Present Time
There is no basis for the Department to award HAV frequencies to Orlando, Fort Myers,
West Palm Beach, Key West, and Jacksonville. The Cuban-American population in these
regions is small, and few charter flights to Cuba have originated from these airports. These cities
do not merit scheduled service to HAV in this first phase of U.S.-Cuba frequency allocations,
and their near-term needs can be met with one-stop scheduled service and charter service.
As to Orlando, demographics and charter traffic data show that a daily scheduled MCO-
HAV frequency would fly nearly empty. In 2015 there were just 65 MCO-HAV charter
flights—an average of 1 per week. Ex. AA-R-205. Daily scheduled service would be a gigantic
increase from this level. The lack of charter traffic should be no surprise, since there are just
30,000 Cuban Americans in Orange County, where MCO is located. Ex. AA-R-425. An overall
allocation of scheduled frequencies based purely on local Cuban-American population or keyed
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A.
Application of JetBlue Airways Corp.
The frequencies proposed by JetBlue have no relation to demand. JetBlue accurately
states that “international frequency allocations to cities without sufficient markets for service can
lead to squandered public benefits and are certainly not in the public interest.” 22 But among all
the airlines’ proposed schedules, this is most applicable to JetBlue. There is insufficient market
demand for JetBlue’s proposed level of service at all six of its proposed U.S. gateways to Havana
(the most of any applicant in this proceeding).
Fort Lauderdale (FLL): JetBlue currently operates just one weekly charter flight
between FLL and HAV, yet it proposes four daily scheduled flights between FLL and HAV.
This vastly surpasses current demand, as described above in Part III of this Answer. JetBlue’s
request is particularly surprising because its weekly FLL-HAV charter flight has historically had
a load factor of around 50 percent. By comparison, American’s MIA-HAV charter flights have
had load factors of around 75 percent. Ex. AA-R-415. And JetBlue’s proposed FLL-HAV
service will have only 15 connections in both directions. Ex. AA-R-410. Whether JetBlue can
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realm of possibility, especially since JetBlue’s proposed JFK-HAV service creates only six
connections in both directions. Ex. AA-R-421.
Orlando (MCO): JetBlue’s request for two daily MCO-HAV frequencies again finds no
basis in demand. As described in Part IV of this Answer, MCO deserves no scheduled
frequencies based on demographic and charter traffic data. The charter traffic from MCO to
HAV in 2015 was around the level of one flight per week . The tiny Cuban-American population
in Orlando, combined with JetBlue’s five connections to HAV through MCO, ex. AA-R-426,
will not support anywhere near the level of one daily MCO-HAV scheduled flight, let alone two.
Tampa (TPA): Similar to JetBlue’s proposed daily service from JFK, JetBlue offers no
answer as to how it plans to go from operating two weekly TPA-HAV charter flights to two daily
TPA-HAV scheduled frequencies. Especially given that JetBlue’s proposed TPA-HAV
frequencies create only four connections to HAV through TPA, ex. AA-R-430, there is zero
basis to assume that demand for service from TPA will suddenly skyrocket to support two daily
TPA-HAV frequencies.
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JetBlue’s last priority among its six requested U.S. gateways, and it should be last on the
Department’s list as well. Ex. AA-R-440.
B.
Application of Southwest Airlines Co.
The nine HAV frequencies requested by Southwest cover three of the U.S. gateways also
requested by JetBlue, and these requests suffer from the same flaw: They are divorced from
demographic and charter traffic reality. Moreover, Southwest’s minimal international operations
from Florida and lack of experience in operating charter flights to Cuba make it particularly
unsuited for its requested HAV frequencies.
Fort Lauderdale (FLL): The six daily FLL-HAV frequencies proposed by Southwest
would amount to 4,380 flights annually—a 6,348 percent increase over the 69 FLL-HAV charter
flights flown in 2015. Ex. AA-R-507. The absurdity of this result speaks for itself.
Tampa (TPA): As described earlier in this Answer, TPA might support one daily flight
to HAV at most. Southwest’s request for two TPA-HAV frequencies is therefore excessive.
Orlando (MCO): The average of one weekly MCO-HAV charter flight and small
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plummeting to 38 percent the next month (the last month for which DOT T-100 data is
available). Ex. AA-R-606, 607.
Delta’s proposed service to HAV from ATL creates comparable connectivity to
American’s proposed service to HAV from CLT and DFW. Ex. AA-R-601. But Delta has
almost no experience operating flights to Cuba, whereas American’s 25 years of experience is
first among all applicants. The steep learning curve required for reliably operating flights to and
from Cuba make American the best choice to provide comprehensive coverage to the entire
United States for U.S.-Cuba service.
Delta will likely struggle to attract passengers from both MIA and MCO. Delta’s lack of
a hub at MIA means that there are few residents of Miami-Dade County with Delta’s frequent
flier membership, and Delta’s operations from MIA in 2015 were tiny compared to American’s,
in terms of both domestic departures and domestic passengers carried. Ex. AA-R-213, 214, 217,
218, 605. As to Delta’s proposed MCO-HAV daily frequency, Orlando’s Cuban-American
population of 30,000 and Delta’s 3 connections (in both directions) through MCO to HAV
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R-704. Second, Frontier has almost no MIA presence. Ex. AA-R-705. And third, Frontier’s
proposed MIA-HAV and DEN-HAV frequencies both have only a single connection in both
directions. Ex. AA-R-706. There is no basis to award service with such little demand and
connectivity, to an airline with limited potential to serve the Cuban-American community and no
experience in Cuba.
E.
Application of Spirit Airlines, Inc.
Spirit only proposes service to HAV from FLL, and as discussed above, there is limited
demand for FLL-HAV service. The Broward County Cuban-American population is only 10
percent as large as Miami-Dade County’s, and historically, FLL has supported barely more than
a single weekly charter flight to HAV. Spirit’s request for two daily FLL-HAV frequencies is
excessive, especially given Spirit’s lack of experience in Cuba and that its proposed service
would create only ten connections through FLL in both directions. Ex. AA-R-806.
F.
Application of United Airlines, Inc.
Several problems with United’s proposed weekly service from IAD, IAH, and ORD arise
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inferior to the quick, every-day-of-the-week one-stop flights between these airports and Cuba
through MIA created by American’s network.
G.
Application of Alaska Airlines, Inc.
Alaska’s request for two daily LAX-HAV frequencies bears no relationship to anticipated
demand. American currently provides a weekly charter flight between LAX and HAV, and
knows the potential demand in the LAX-HAV market better than any other airline. If LAX
could support more than one weekly frequency to HAV, American would have applied for more.
The lack of LAX-HAV demand is demonstrated by the fact that the weekly charter flight
American operates has a load factor of under 50 percent. 23 Ex. AA-R-1002. Alaska must
stimulate demand by over 600 percent to support a 50 percent load factor on just one of its two
proposed daily LAX-HAV frequencies, ex. AA-R-1003, and Alaska offers no explanation for
how it plans to do so. The three connecting flights Alaska’s proposed service creates will hardly
increase traffic over current levels or improve travel times. Ex. AA-R-1004, 1005. LAX is best
served, for now, with the weekly scheduled service to HAV proposed by American, not the daily
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Country’s network would create only one connection in both directions at each airport. Ex. AA-
R-1102, 1105. There is no reason for either of these requested frequencies to be awarded.
I.
Application of Federal Express Corp.
The cargo service proposed by FedEx raises two issues. First, FedEx’s proposed service
from HAV to Mérida, Mexico (“MID”) is arguably outside the scope of the U.S.-Cuba MOU.
The MOU provides that “[t]he permission to perform scheduled and charter services between
any point or points in the United States and any point or points in Cuba,” and merely allows for
“stops for non-traffic purposes within or outside the territory of either country.” 25 Ex. AA-R-
1201. Whether this permits FedEx’s proposed MIA-HAV-MID-MIA frequency is unclear, and
the Department must resolve this question before granting FedEx any scheduled frequencies.
Second, FedEx admits that it must fly from HAV to MID “so that the flights can be economically
viable.”26 This raises another important question: Is now the right time to award a scarce HAV
scheduled frequency purely for cargo, when there is insufficient demand for cargo service from
HAV to MIA? At this time, charter flights may be more appropriate for U.S.-Cuba cargo
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substantial portion of the country from the benefits of the requested frequencies, because
Dynamic does not serve behind-gateway traffic.
Dynamic’s proposal is also not viable. First, despite having issued an order granting
Dynamic scheduled air-transportation authority, the Department has not made this authority
effective. Dynamic has not provided a clear timeline indicating when it will satisfy the
conditions of receiving effective authority, and when the Department will complete its review of
recent safety and delay incidents.29 Second, the foreign scheduled air transportation authority
Dynamic will have if its certificate becomes effective is limited to two points, one in China and
one in Guyana. Dynamic proposes a substantial change in operations that more than doubles the
certificate authority it might receive and substantially alters the operating costs upon which the
Department based its latest fitness finding for Dynamic. But Dynamic has not shown that it has
sufficient resources to cover the pre-operating costs and operating costs related to these routes.
Third, Dynamic has no experience operating to Cuba. And fourth, given current OFAC
restrictions on passengers, the large size of Dynamic’s equipment, and Dynamic’s proposed U.S.
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Consolidated Answer of American Airlines, Inc.Page 29 of 30
frequencies.30 And it does not possess adequate economic authority to use the frequencies. Any
grant of exemption authority by the Department cannot cure Eastern’s lack of FAA authority.
Eastern also does not appear able to perform the basic task of issuing a ticket and accepting
payment via its website. And as a charter carrier, Eastern likely lacks the reservations and
customer-service team necessary to handle scheduled passenger traffic. Eastern does not need its
requested MIA-HAV frequencies to continue serving this route via charter flights, and until
Eastern cures these deficiencies, it should not receive consideration for one of the limited
frequencies to HAV available in this proceeding.
L. Application of Silver Airways Corp.
Silver’s proposed use of 34-seat turboprop planes would drastically underutilize the
available frequencies to HAV. This equipment is far too small to serve anticipated U.S.-Cuba
traffic, and Silver should not be awarded any frequencies to Cuba when many carriers, such as
American, have proposed service using planes that can seat five times as many passengers.
There are far too few frequencies available in this proceeding to allocate even one to a carrier
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Consolidated Answer of American Airlines, Inc.Page 30 of 30
For the reasons stated above, American respectfully requests that the Department of
Transportation grant its application to operate 22 scheduled frequencies between the United
States and Cuba.
Respectfully submitted,
________________________
Howard KassVice PresidentRegulatory Affairs
Robert A. WirickManaging DirectorRegulatory and International Affairs
John B. WilliamsSenior Analyst
Regulatory and International Affairs
AMERICAN AIRLINES, INC.
Paul T. DenisSteven G. BradburyWilliam B. Sohn
DECHERT LLP1900 K Street NWWashington, D.C. 20006(202) 261-3300 paul.denis@dechert.com
steven.bradbury@dechert.com
william.sohn@dechert.com
Charles A. Hunnicutt
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CERTIFICATE OF SERVICE
I certify that, on March 14, 2016, I caused to be served a copy of the foregoingConsolidated Answer of American Airlines, Inc. by email upon those addressees listed below:
brian.hedberg@dot.gov (Dept. of Transportation)todd.homan@dot.gov (Dept. of Transportation) peter.irvine@dot.gov (Dept. of Transportation) brett.kruger@dot.gov (Dept. of Transportation) dan.weiss@united.com (United)
steve.morrissey@united.com (United)gmurphy@crowell.com (Counsel for United)mwarren@crowell.com (Counsel for United)sseiden@crowell.com (Counsel for United)robert.land@jetblue.com (JetBlue) esahr@eckertseamans.com (Counsel for JetBlue) dderco@eckertseamans.com (Counsel for JetBlue) perkmann@cooley.com (Counsel for Hawaiian)
john.varley@virginamerica.com (Virgin America)mlbenge@zsrlaw.com (Counsel for Virgin America) jhfoglia@zsrlaw.com (Counsel for Virgin America) megan.ouellette@alaskaair.com (Alaska) john.kirby@alaskaair.com (Alaska) jeremy.ross@alaskaair.com (Alaska)dheffernan@cozen.com (Counsel for Alaska)rwelford@cozen.com (Counsel for Alaska)
jyoung@yklaw.com (Counsel for Spirit) dkirstein@yklaw.com (Counsel for Spirit)
englets@state.gov (Dept. of State) cristinasa@state.gov (Dept. of State)sami.teittinen@silverairways.com (Silver) bryan.winters@silverairways.com (Silver) john@mietuslaw.com (Counsel for Eastern)
chris.walker@delta.com (Delta)alex.krulic@delta.com (Delta) bob.kneisley@wnco.com (Southwest)leslie.abbott@wnco.com (Southwest)howard.diamond@flyfrontier.com (Frontier)foont@foontlaw.com (Counsel for Frontier)cefelts@fedex.com (FedEx)nssparks@fedex.com (FedEx)
jackerman@dfwairport.com ( DFW) bdcagle@cltairport.com (CLT) dflint@lawa.org (LAWA)kpyatt@miami-airport.com (MIA) rbtrinder@zsrlaw.com ( IAH ) jasilversmith@zsrlaw.com ( IAH )mgoldman@sgbdc.cominfo@airlineinfo.com
mailto:rbtrinder@zsrlaw.commailto:jasilversmith@zsrlaw.commailto:jasilversmith@zsrlaw.commailto:rbtrinder@zsrlaw.com
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Testimony
DOT Docket OST-2016-0021
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Testimony
AA-R-T-1 Testimony of Tessie Aral
Testimony of American Airlines
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A Better Choice Travel
ABC Charters TM
Tel: (305) 263 - 6555 Fax: (305) 263
-
6801
Toll Free: (866) 4ABC - AIR
1125 SW 87 AVE MIAMI FL 33174
Testimony of Tessie Aral
President
ABC Charters, Inc.
March 14, 2016
My name is Maria T Aral, and I am the President of ABC Charters, Inc. ABC Charters
holds a General License from the Office of Foreign Assets Control (“OFAC”) to provide charter
air service between the United States and Cuba, and has provided regular U.S.-Cuba charterservice since 2000. ABC Charters currently provides more than 800 annual flights to Cuba, the
overwhelming number of which originate at Miami International Airport (“MIA”) and are
operated by American Airlines, Inc. (“American”). We also provide charter flights operated by
other airlines as well. I’ve worked with American for many years, and my testimony will focuson the need for extensive U.S.-Cuba scheduled frequencies from MIA, as American proposes.
Cuba is unique among international destinations due to the current restrictions on U.S.-Cuba travel. In general there are three types of international travelers: (1) leisure travelers; (2)
travelers visiting family and relatives; and (3) business travelers. But U.S. law currently
prohibits leisure travel to Cuba, and U.S.-Cuba trade is also limited by law, meaning that those
visiting family and relatives in Cuba comprise most of the U.S.-Cuba traffic. This will notchange until the existing sanctions are lifted. It follows that charter service to Cuba, and the
scheduled service to come, must primarily originate at airports that can best serve the Cuban-
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It’s no surprise that most of the region’s Cuban Americans prefer MIA to FLL for short U.S.-
Cuba flights.
The preference of Cuban-American travelers is reflected in data on U.S.-Cuba charter
flights. Flights to Cuba have been allowed from FLL for nearly five years, yet in 2015, 83 percent of all flights from the United States to Havana’s José Martí International Airport
(“HAV”) originated from MIA, and just 2 percent originated from FLL. On average there wereover seven flights per day from MIA to HAV in 2015, and less than two flights per week from
FLL to HAV. Indeed, of the more than eight hundred charter flights that my company flew to
Cuba in 2015, just one was from FLL, and I’ve only been asked to provide 3 private groupcharter flights to Cuba from FLL in the past five years. If demand for flights from FLL to HAV
were greater, surely more charter service providers such as mine would have initiated service to
Cuba from FLL, but that hasn’t happened. Instead, I’ve observed weak demand for the few FLLto HAV charter flights offered since 2011, only being able to sustain one rotation per week. The
Miami-Dade Cuban American population strongly favors MIA, and there is not enough local
demand in Fort Lauderdale/Broward County to support daily FLL-HAV charter flights.
There is also smaller demand for charter flights to Cuba from other airports. My company
provided no charter flights to Cuba from any other Florida airport in 2015 except for the three
weekly flights from Tampa to Havana. Since 2011, we have not received any requests forcharters to Cuba from MCO, RSW, PBI, EYW and JAX. With the flights arranged from Tampa
and those from Miami, it covers all the demand in the state of Florida. Accorss the entire
charter industry, just 115 flights were flown from EYW in 2015 (all with very small airplanes,not regional or mainline jets), 65 from MCO, 9 from RWS and none from PBI and JAX.
Consistent with demographics, top demand for U.S.-Cuba flights continue to be centered on
MIA.
There’s no reason to expect anything different when U.S.-Cuba scheduled service arrives.Scheduled service won’t change demographics. Cuban Americans, who are concentrated in
areas near MIA will continue to prefer their neighborhood airport for U S Cuba travel The
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Letter of Support
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Letter of Support
Letter from Mike Fernandez
Letter of Support of American Airlines
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Rebuttal Exhibits
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Exhibit
Number Title
AA-R-101 Summary of Applicants and Proposed U.S. Gateways For Havana Service
AA-R-102 U.S. Carrier Applicant Proposed Frequencies to Havana by Gateway
AA-R-103 Some Threshold "Disqualifying" Issues
AA-R-104 Applicants in This Proceeding Agree That the Overwhelming Source of Traffic to Havana Will Be the U.S. Cuban- American Population
AA-R-105 Data Point #1: U.S. Cuban-American Population - MIA is, Unquestionably, the U.S. Gateway with the Largest U.S.
Cuban-American Population, and, Thus, Has the Most Proven Need for HAV Frequencies AA-R-106 Allocating U.S.-Havana Frequencies in This Proceeding Based on the Size and Location of Cuban-American
Population, MIA Should Receive 12 U.S.-Havana Frequencies of the 20 Available
AA-R-107 A Comparison of the Frequency Allocation Based on the U.S. Gateways Proposed in This Proceeding with the
Frequencies Requested at Each U.S. Gateway Shows that the MIA-HAV "Asks" Were in Line with Historical Demand
AA-R-108 FLL Has the Largest Difference Between Its Proportionate Share of U.S.-Havana Frequencies and the Number of
U.S.-Havana Frequencies Requested
AA-R-109 Based on Percentages, MIA Has the Smallest Difference Between Its Proportionate Share of U.S.-Havana
frequencies and the Frequencies Requested at MIA of Any Gateway for Which Daily Service Is Proposed
AA-R-110 Date Point #2: Historical Information on U.S.-Cuba Charter Flights - The Overwhelming Number of Charter Operated
From The U.S. Gateways Proposed in This Proceeding to Cuba Originated at MIA in 2015 - Over 86%
AA-R-111 Data Point #3: Historical Information on U.S.-Havana Charter Flights - Close to 84% of All Charters Between the U.S.
and Havana in 2015 Originated At MIA
Rebuttal Exhibits of American Airlines
List of Rebuttal ExhibitsPage 1 of 14
DOT Docket OST-2016-0021List of Rebuttal Exhibits
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Exhibit
Number Title
Rebuttal Exhibits of American Airlines
List of Rebuttal ExhibitsPage 2 of 14
AA-R-112 Allocating U.S.-Havana Frequencies in This Proceeding Based on the Number of U.S.-Havana Charter Flights
Operated in 2015 Proportionately to Each U.S. Gateway, MIA Should Receive 17 of the 20 Available U.S.-HavanaFrequencies
AA-R-113 A Comparison of the Frequency Allocation Based on 2015 Charter Flights Operated with the Frequencies Proposed
at Each U.S. Gateway Shows that MIA's, and Only MIA's, Request for HAV Service Is Less Than Its Proportionate
Share of Historical Charter Flights
AA-R-114 Several Applicants Did Not Build Realistic Connections to Their Proposed U.S.-Havana Services
AA-R-115 Several Applicants Included "Connecting" Flights with Maximum Connection Times Exceeding Four Hours andMinimum Connecting Times on the Outbound Flight of Less Than 55 Minutes
AA-R-116 Adjusting the Applicants' Claimed Connections for the Same Connections Methodology Used by American Shows:
AA-R-201 Remarks of U.S. Senator Jeff Flake on Senate Floor
AA-R-202 MIA Is the Home of Almost 50% of the U.S. Cuban-American Population and the Epicenter of U.S.-Havana Flights
and Passenger Demand
AA-R-203 American's MIA-HAV Request Is Less Than MIA's Proportionate Share of U.S.-Havana Frequency Allocations
AA-R-204 In Addition, American's MIA-HAV Service Provides Comprehensive Domestic U.S. Coverage
AA-R-205 American's Request for Ten Miami-Havana Frequencies Only Matches -- Actually "Under-Requests" -- Existing
Charter Demand
AA-R-206 American's request for Daily CLT Frequencies Provides a Combination of Service to the Charlotte Cuban-American
Community and, Together with MIA, the Largest and Most Efficient Connecting Gateway Combination to HAV for the
Entire U.S.
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Exhibit
Number Title
Rebuttal Exhibits of American Airlines
List of Rebuttal ExhibitsPage 3 of 14
AA-R-207 American's Request for Daily DFW Frequencies Enables service to the Local Dallas/Fort Worth Cuban-American
Community and Further Complements the Domestic Coverage of MIA and CLT
AA-R-208 American's Request for Once Weekly ORD Frequency Meets the Demand of the Local Chicago Cuban-American
Community. More Than Twice Weekly Service Would Be Excessive to the Current and Anticipated Demand in the
ORD-HAV Market
AA-R-209 American's Request for Once Weekly Service from LAX Is Consistent with Existing and Anticipated LAX-HAV
Demand
AA-R-210 American Airlines Is "Miami's Hometown Airline"
AA-R-211 American Serves More Than 3x the Number of Domestic U.S. Destinations from MIA Than the Other Three
Applicants for MIA-HAV Services Combined
AA-R-212 American's Domestic Service Share at MIA Far Outstrips the Share of the Other Three MIA-HAV Applicants
Combined
AA-R-213 American Operates Almost 6x as Many Domestic Departures at MIA as the Other Three MIA-HAV Applicants
Combined
AA-R-214 Of All the MIA-HAV Applicants, American Accounts for 85% of All the MIA Domestic Departures
AA-R-215 American Flies More Than 83% of the Domestic Seats at MIA - More Than All of the Other MIA-HAV ApplicantsCombined
AA-R-216 American Flies More Than 5x the Number of Domestic Seats from MIA as the Other Three MIA-HAV Applicants
Combined
AA-R-217 American Flew More Than Five Times the Number of Domestic Passengers at MIA Than the Three Other MIA-HAV Applicants Combined
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Exhibit
Number Title
Rebuttal Exhibits of American Airlines
List of Rebuttal ExhibitsPage 4 of 14
AA-R-218 Of All the MIA-HAV Applicants, American Accounted for 84.5% of All MIA Domestic Passengers
AA-R-219 American Has the Longest and Deepest Experience in U.S.-Cuba Flights and Operational Know-How in the Unique
Cuba Market
AA-R-220 The Importance of Knowing the Unique Cuba Aviation Structure Was Highlighted on the Floor of the U.S. Senate
AA-R-301 A Comparison of the Frequency Allocation Based on the U.S. Gateway Proposed in This Proceeding with the
Frequencies Requested at Each U.S. Gateway
AA-R-302 American Airlines' Request for 10 Daily MIA-HAV Flights Is Less Than MIA's Proportionate Share - Even Before Adjusting for Any Growth, Which Will Be Greater at MIA Than Anywhere Else
AA-R-303 In Contrast to American's MIA-HAV Frequency Request, JetBlue's Requests for U.S.-HAV Freuencies Are Excessive
to Current and Anticipated Demand from JetBlue's Requested U.S. Gateways
AA-R-304 In Contrast to American's MIA-HAV Frequency Request, Southwest's Requests for U.S.-HAV Freuencies Are
Excessive to Current and Anticipated Demand from Southwest's Requested U.S. Gateways
AA-R-305 In Contrast to American's MIA-HAV Frequency Request, Alaska's Requests for U.S.-HAV Freuencies Are Excessive
to Current and Anticipated Demand from Alaska's Requested U.S. Gateways
AA-R-306 In Contrast to American's MIA-HAV Frequency Request, Spirit's Requests for U.S.-HAV Freuencies Are Excessive toCurrent and Anticipated Demand from Spirit's Requested U.S. Gateways
AA-R-307 There Is More Cuban-American Population per Requested HAV Frequency at MIA Than Any Other Requested U.S.
Gateway
AA-R-308 There Is More Cuban-American Population per Requested HAV Frequency at MIA Than Any Other Requested
Florida Gateway
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Exhibit
Number Title
Rebuttal Exhibits of American Airlines
Page 5 of 14
AA-R-309 Service to MCO Ranked No Higher Than 5th In Any Applicant's Prioritization of Havana Routes
AA-R-310 Service to TPA Ranked NO Higher Than 6th In Any Applicant's Prioritization of Havana Routes
AA-R-311 The "FLL Applicants" Attempt to Claim MIA's and Miami-Dade County's 856,007 Cuban-Amerians as Their Own is
Patently False
AA-R-312 FLL ≠ MIA
AA-R-313 Several Gateways Claim Broad U.S. Coverage to Cuba, But Only 4 Carrier Gateways Can Legitimately Provide
Connections to Most of the U.S. AA-R-401 JetBlue's Request for Four Daily FLL-HAV Flights Greatly Exceeds FLL-HAV's Proportionate Share of the Total U.S.-
HAV Frequency Allocation
AA-R-402 …And, When Combined with the Requests of All Other FLL Applicants, the FLL-HAV Frequency Request Is "Off The
Charts" Excessive
AA-R-403 The Cuban-American Population of Broward Count (FLL's Home) Is Miniscule Compared to Miami-Dade County
(MIA's Home)
AA-R-404 JetBlue Tries to Claim that MIA's Traffic and Demand Are "Also" FLL's, But It Just Isn't So
AA-R-405 …And Other Applicants (Non-FLL Applicants) Have Said It Isn't So:
AA-R-406 And One Applicant, Which Did Not Apply for FLL-HAV Service, Admitted That FLL's Catchment Area Is One-Tenththe Size of MIA's
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Exhibit
Number Title
Rebuttal Exhibits of American Airlines
Page 6 of 14
AA-R-407 Historical Data Proves That MIA-HAV Demand Far Outstrips FLL-HAV Demand
AA-R-408 Havana Arriving Flights Involve a Change of Terminals at FLL and Either a Walk Outside Between Terminals or a
Connector Bus
AA-R-409 While American's Havana Arriving Flights Are All Under "One Roof"
AA-R-410 JetBlue's FLL-HAV Will Have Only a Small Number of Connections to HAV in Both Directions
AA-R-411 JetBlue's 15 FLL-HAV Connections Cannot Compare to American's 58 MIA-HAV Connections
AA-R-412 JetBlue's FLL-HAV Charter Experience Is Not Comparable or Even Close to American's MIA-HAV CharterExperience
AA-R-413 JetBlue's FLL-HAV Charters Have Experienced Load Factors That Have Been, Well, Let Us Just Say, Challenging
AA-R-414 American's MIA-HAV Charters Have Enjoyed Strong Load Factors
AA-R-415 As Demonstrated, JetBlue's FLL-HAV Charters' Load Factors Cannot Compare to American's MIA-HAV Charters'Load Factors
AA-R-416 JetBlue's Double Daily JFK-HAV Request Exceeds JFK-HAV's Proportionate Share of U.S.-Cuba Frequency
Allocation
AA-R-417 JetBlue's Double Daily JFK-HAV Request, When Combined with Delta's Single Daily JFK-HAV Request, Would Allocate Far Greater Frequencies to JFK-HAV Than Demand Warrants
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Exhibit
Number Title
Rebuttal Exhibits of American Airlines
Page 7 of 14
AA-R-418 JetBlue Has Been Operating Charters in the JFK-HAV Market Since 2015…But Only Twice Weekly. If JFK-HAV
Demand Existed for a Daily or Double Daily Flight, Why Hasn't JetBlue Increased the Frequency?
AA-R-419 The Reason JetBlue Has Not Increased JFK-HAV Frequencies: JetBlue's JFK-HAV Load Factors Have Been
Mediocre with Only Two Weekly Flights
AA-R-420 …So One Could Imagine What the Load Factor Would Be With a Seven-Fold Increase in Service
AA-R-421 …And This Would Be Without the Benefit of Significant JetBlue Connections at JFK
AA-R-422 The Modest Demand for JFK-HAV Service Is Not Surprising Given the Size of the Cuban-American Popuation andthe Historical Demand for JFK-HAV Service
AA-R-423 JetBlue's request for Double Daily MCO-HAV Service Greatly Exaggerates the Size of the MCO-HAV Market
AA-R-424 JetBlue's Exaggerated MCO-HAV Request Is Made Worse by the Requests of Southwest and Delta. When
Combined, the Total MCO-HAV Requests Bear No Relationship to the Needs of or Demand in the MCO-HAV Market
AA-R-425 MCO's Catchment Area is 3.5% the Size of MIA's
AA-R-426 JetBlue Would Provide Only 5 Connections in Both Directions For its Mco-HAV Flight
AA-R-427 JetBlue's TPA-HAV Request for Double Daijly Service Over-Asks Based on the Demand in the Market
AA-R-428 When Combined with Southwest's Double Daily TPA-HAV Request, the Total TPA-HAV Frequency Request IsGrossly Oversubscribed
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Exhibit
Number Title
Rebuttal Exhibits of American Airlines
Page 8 of 14
AA-R-429 TPA's Catchment Area Is 10% the Size of MIA's
AA-R-430 JetBlue Would Have Only 4 Connections in Both Directions for Its TPA-HAV Service
AA-R-431 TPA's Cuban-American Population (Hillsborough County) Is a Fraction of MIA's (Miami-Dade County)
AA-R-432 TPA's Charter Flight History to Havana Demosntrates That Even a Single Daily Scheduled TPA-HAV Service Is Not
Warranted
AA-R-433 To Go from a 71% Load Factor on Two Weekly Flights to a 71% Load Factor on 14 Weekly Flights Requires a
Staggering 700% Stimulation AA-R-434 JetBlue's Proposed EWR-HAV Service Must Be Considered an Extreme Reach by JetBlue
AA-R-435 EWR-HAV Is JetBlue's Next to Last Gateway Priority Among Its Six Proposed U.S. Gateways to Havana (the Most of Any Applicant in This Proceeding)
AA-R-436 JetBlue Would Have No Connections in Both Directions for Its EWR-HAV Service
AA-R-437 JetBlue's BOS-HAV request for a Daily Service Is, at Best, Aspirational, Not Realistic Now
AA-R-438 Boston's Cuban-American Population Is Small
AA-R-439 JetBlue Would Have Only 1 Connection in Both Directions for Its BOS-HAV Service, and That Would Be to JFK
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Exhibit
Number Title
Rebuttal Exhibits of American Airlines
Page 9 of 14
AA-R-440 BOS-HAV Is The Last of the Six JetBlue U.S. Gateway Priorities
AA-R-441 Notwithstanding JetBlue's Self-Laudatory Claims, American Outshines JetBlue
AA-R-442 JetBlue Touts Its Customer Service "Advantages," But American's Advantages Are More Meaningful and Important to
Cuba-Destined U.S. Passengers
AA-R-501 Southwest's FLL-HAV Request for Six Daily Frequencies Vastly Exceeds FLL-HAV's Proportionate Share of the U.S.-Havana Frequency Allocation
AA-R-502 Southwest's FLL-HAV Request for Six Daily Frequencies, When Combined with the Other FLL Applicants' Requests,Would Result in FLL Having Almost as Many Havana Flights as MIA … an Absurd Result
AA-R-503 Southwest's Request for Six Daily FLL-HAV Frequencies Is Far Above and Beyond Current Demand and AnyReasonable Forecast of Expected Demand
AA-R-504 Southwest's FLL-HAV Service Would Have Only 20 Connections in Both Directions
AA-R-505 FLL's Catchment Area Is 10% the Size of MIA's
AA-R-506 Southwest Has Never Operated a Single Flight to Cuba, let Alone Any Flights in the FLL-HAV Market
AA-R-507 In Order to Operate Six Daily Flights at Just 70% Load Factor (Well Below Its Average Load Factor), Southwest
Would Have to "Stimulate" the FLL-HAV Market by 4,860%, Assuming All 2015 FLL-HAV Charter Flights Operated ata 100% Load Factor
AA-R-508 Southwest's Request for Double Daily TPA-HAV Frequencies Exceeds TPA-HAV's Proportionate Share of U.S.-
Havana Frequency Allocation
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Exhibit
Number Title
Rebuttal Exhibits of American Airlines
Page 10 of 14
AA-R-509 Southwest's TPA-HAV Double Daily Request, When Combined with JetBlue's Double Daily TPA-HAV request, Is
Excessive to TPA-HAV's Proportionate Share of U.S.-HAV Frequency Allocation
AA-R-510 Southwest's TPA-HAV Double Daily Request Severely Exceeds Historical, Current and Expected Demand in the
TPA-HAV Market
AA-R-511 Southwest Has No Experience in the TPA-HAV Market
AA-R-512 Southwest's TPA-HAV Service Would Have Only 15 Connections in Both Directions
AA-R-513 TPA's Catchment Area Is 10% the Size of MIA's AA-R-514 TPA-HAV Was Southwest's Second to Last Priority Out of Nine Proposed HAV Service
AA-R-515 Southwest's MCO-HAV Request for a Daily Frequency Allocation, When Combined with the Other Requests, Greatly
Exceeds MCO-HAV's Proportionate Share of U.S.-HAV Frequency Allocation
AA-R-516 Southwest's MCO-HAV Service Would Provide Only 10 Connections in Both Directions
AA-R-517 Southwest Has No Experience in the MCO-HAV Market
AA-R-518 MCO's Catchment Area Is 3.5% the Size of MIA's
AA-R-519 MCO-HAV Had Only 65 Charter Flights In 2015
AA-R-520 MCO-HAV Was Southwest's Last Priority Out of Nine Proposed HAV Services
AA-R-521 Southwest's HAV Forecasts Are a Result in Search of a Justification
AA-R-522 Southwest's Use of Canada MIDT Data in Its Forecast Is Just Plain Wrong
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Exhibit
Number Title
Rebuttal Exhibits of American Airlines
Page 11 of 14
AA-R-523 Southwest's Forecast for Proposed FLL-VRA Service Is Filled with Flaws
AA-R-601 ATL, Like CLT (and DFW), Provides Broad Coverage of the U.S.-HAV Markets Not Served by American Over MIA
AA-R-602 Delta's Request for a Daily JFK-HAV Frequency Allotment Is Proportionate to the U.S.-Cuba Frequency Allocation for
JFK, but Three JFK Daily Requests to Havana Are Excessive to Both Demand and Historical Traffic
AA-R-603 Delta's JFK-HAV Service Would Provide Only 2 Connections in Both Directions
AA-R-604 Delta's Daily JFK-HAV Request Is Excessive to Historical JFK-HAV Charter Demand
AA-R-605 Delta's MIA-HAV Proposed Service Has No Basis to Operate Successfully
AA-R-606 Delta's Other Attempt to Operate a Non-Hub International Flight at MIA Did Not Go Well or Last Long
AA-R-607 And Delta's Current Non-Hub International Flight at PHL Is Not Going Well
AA-R-608 Delta's MCO-Havana Proposed Daily Service, When Combined with the Other MCO-HAV Requests, Is Extremely
Excessive to Any Current or Even Medium-Term Real or Aspirational Demand
AA-R-609 Delta's MCO-HAV Service Would Provide Only 3 Connections in Both Directions
AA-R-610 MCO's Catchment Area is 3.5% the Size of MIA's
AA-R-611 MCO-HAV Has Experienced Very Little Charter Activity, and Nothing Compared to MIA-HAV
AA-R-612 Delta Has Operated No Charter to Havana from MCO
AA-R-613 MCO-HAV Was Delta's Last Priority Among Proposed Routes
AA-R-614
While No Forecast Was Required, and Any Forecast in the U.S.-Cuba Market Is Fraught with Unknowns, Delta's
Forecast Is at Best a Guesstimate with no Basis in Fact or Data
DOT Docket OST-2016-0021List of Rebuttal Exhibits
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Exhibit
Number Title
Rebuttal Exhibits of American Airlines
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AA-R-701 Frontier's Request for the First Two of Its Three Proposed Daily MIA-HAV Flights Is Tied to Frontier Also Receiving
DEN-HAV Frequencies, and There Is No Basis - or Demand - for DEN-HAV Service
AA-R-702 DEN-HAV's Proportionate Share of U.S.-Havana Frequency Allocation Is Zero, yet Frontier Requests a Daily DEN-
HAV Frequency
AA-R-703 Frontier Has Never Operated Charter Flights to Cuba
AA-R-704 Cuban-American Population in Denver
AA-R-705 Frontier Has No Meaningful Presence in MIA AA-R-706 Frontier's MIA-HAV and DEN-HAV Flights Would Have Only a Single Connection in Both Directions
AA-R-801 Spirit's Request for Two Daily FLL-HAV Frequencies Exceeds FLL's Proportionate Share of the U.S.-HavanaFrequency Allocation
AA-R-802 Spirit's Request, Combined with the Other FLL-HAV Requests, Is "Off the Chart" Excessive Compared to Actual
Current Demand and Any Expectation of Future Demand
AA-R-803 FLL's Catchment Area Is 10% the Size of MIA's
AA-R-804 Spirit Has No Cuba Experience
AA-R-805 There Has Been Miniscule Demand for Charter Flights from FLL to HAV or Anywhere in Cuba … That's Highly
Probative of Future Demand
AA-R-806 Spirit's FLL-HAV Service Would Have only 10 Connections in Both Directions
AA-R-901 United's Request for a Daily EWR-HAV Service Is in Line with Its Proportionate Share of U.S.-Havana Frequencies
DOT Docket OST-2016-0021List of Rebuttal Exhibits
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Exhibit
Number Title
Rebuttal Exhibits of American Airlines
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AA-R-902 But United's EWR-HAV Request Plus JetBlue's Daily EWR-HAV Service Request Exceeds EWR's Proportionate
Share of the U.S. EWR-HAV Frequency Allocation
AA-R-903 United's EWR-HAV Service Offers Only 25 Connecting in Both Direction, Compared to 68 Provided by American at
CLT, 58 at MIA and 52 at DFW
AA-R-904 United's Once Weekly Request for IAH Does Not Permit IAH-Originating Travelers to Go to or Return from Havanaon Any of the Other Six Days without Extreme Circuity and Unbearable Elapsed Times
AA-R-905 United's Once Weekly Request for IAD Does Not Permit IAD-Originating Travelers to Go to or Return from Havana
on Any of the Other Six Days without Doubling Their Travel Time
AA-R-906 United Once Weekly Request for ORD Does Not Permit ORD-Originating Travlers to Go to or Return from Havanaon Any of the Other Six Days without Doubling Their Elapsed Travel Time
AA-R-907 United Has Operated No Charter Flights to Cuba Since 2013
AA-R-1001 Alaska Airlines Request for Double Daily LAX-HAV Frequencies Is Excessive in the Extreme and Bears No
Rational Relationship to Historical, Current or Future Demand
AA-R-1002 American Knows the LAX-HAV Market, Current Operates LAX-HAV Charters (at less than 50% Load Factor) and, if
There were Sufficient Demand to Warrant Inreasing Its Single Weekly Service, American Would Have Done
So…and It Has Not
AA-R-1003 If Once-Weekly LAX-HAV Charter Flight Current Operated by American Has Experienced a Load Factor of LessThan 50% from the Start of the Service to Date, Can Anyone Believe That a Daily or Double Daily Service Will Be a
Viable or Prudent Use of Scarce Havana Frequency Allocations?
AA-R-1004 Alaska's Proposed LAX-HAV Services Would Have Only 3 Connections
DOT Docket OST-2016-0021List of Rebuttal Exhibits
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Exhibit
Number Title
Rebuttal Exhibits of American Airlines
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AA-R-1005 Of the 3 Connections Alaska Has to Its LAX-HAV Flight, One - SEA - Actually Has Better Connect Times on
American
AA-R-1006 Alaska States an Estimated LAX-HAV Market Size but Without Attempting to Explain it, Source it, or Justify it
AA-R-1101 Sun Country's Proposed RSW-HAV Service Would Greatly Exceed the Historical Demand for RSW-HAV
AA-R-1102 Sun Country Would Have a Single Connection at RSW in Both Directions
AA-R-1103 Sun Country's Proposed Twice-Weekly MSP-HAV Service Would Greatly Exceed MSP-HAV's Proportionate Share
of U.S.-Havana Frequency Allocation AA-R-1104 Sun Country's Proposed Twice-Weekly MSP-HAV Service Would Greatly Exceed Historical Demand
AA-R-1105 Sun Country's MSP-HAV Service Would Have Only a Single Connection in Both Directions
AA-R-1106 Sun Country's MSP-HAV Passengers Would Have No Way to Return from HAV on Sun Country on the Five Days
of the Week on Which Sun Country Does Not Operate
AA-R-1201 FedEx Is Right That It Is Not "Asking For Much" (FedEx Argument, p.1), But Is the Authority It Seeks Consistent
with the U.S.-Cuba MOU?
AA-R-1202 FedEx Proposes the HAV-MID Blind Sector Because of the Lack of HAV-MIA Traffic, So Is Now the Right Time to
Award Any Scarce and Highly In-Demand U.S.-Cuba Frequencies for a Cargo Service That Has Not YetMaterialized?
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Series 100:
General Rebuttal Exhibits
of American Airl ines
DOT Docket OST-2016-0021Exhibit AA-R-101
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Summary of Applicants and Proposed U.S. Gateways For Havana Service
13 applicants for U.S.-Cuba
Frequency Allocations
397 U.S.-Havana weekly
frequencies requested
Total Weekly Frequencies
by All ApplicantsGateways to Havana
117 MIA
91 FLL
28 MCO
28 TPA
24 JFK
19 LAX
15 EWR
14 PBI9 RSW
7 CLT
7 DFW
7 BOS
7 DEN
7 ATL
6 ORD
5 EYW
2 JAX
2 MSP
1 IAH
1 IAD
Page 1 of 1
DOT Docket OST-2016-0021Exhibit AA-R-102
P 1 f 1
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U.S. Carrier Applicant Proposed Frequencies to Havana by Gateway
117
91
28 2824
1915 14
9 7 7 7 7 7 6 52 2 1 1
0
20
40
60
80
100
120
140
MIA FLL TPA MCO JFK EWR LAX PBI RSW CLT DFW BOS DEN ATL ORD EYW JAX MSP IAH IAD
Source: Carrier Applications
Page 1 of 1
Weekly Frequencies
DOT Docket OST-2016-0021Exhibit AA-R-103
P 1 f 1
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Some Threshold “Disqualifying” Issues
Lack of current necessary authority to engage in
foreign scheduled air transportation
Application based on use of small, propeller aircraft
(34 seats only) for allocation of highly scarce,
heavily in-demand U.S.-Havana frequencies
Lack of ability to sell scheduled tickets
− No online booking portal
For these reasons, American’s Rebuttal Exhibits wi ll focus
on the service proposals of the other applicants in this proceeding
Dynamic International Airways
Eastern Airlines
Silver Airways
Eastern Airlines
Note: American uses “disqualifying” in the sense of clearly not maximizing the public benefits.
Issue Relevant Applicants
Page 1 of 1
DOT Docket OST-2016-0021Exhibit AA-R-104
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Applicants In This Proceeding Agree That the Overwhelming
Source of Traffic to Havana Will Be the U.S. Cuban American Population
Carrier Comments
Southwest
JetBlue
Frontier
Silver
“. . . [t]he distribution of Cuban Americanpopulation [will be] the most likely major centers
for travel from the U.S. . . .”
(Application, Page 3)
“. . . [F]amilial, cultural and educational travel . . .
will be the primary drivers of United States-Cuba
traffic until Congress takes further steps torescind the embargo.”
(Application, Page 18)
“. . . [T]he largest population eligible to travel to
Cuba are those permitted to do so to visit ‘closer
relatives’ there.” (Application, Page 18)
“. . . Cuban Americans comprise the vast
majority of likely Cuba travelers.”
(Application, Page 9)
Page 1 of 1
Data Point #1: U.S. Cuban-American PopulationDOT Docket OST-2016-0021
Exhibit AA-R-105
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MIA is, Unquestionably, the U.S. Gateway with the Largest U.S. Cuban-American
Population, and, Thus, Has the Most Proven Need for HAV Frequencies
Page 1 of 1
Top 10 States – Cuban-American Population
1,213,438
88,607 83,362 70,803 46,541 25,048 22,541 21,459 18,079 17,930
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
Florida California New Jersey New York Texas Georgia Illinois Nevada NorthCarolina
Pennsylvania
Miami-Dade (MIA): 856,007
Miami-Dade County represents almost half (47.9%)
of the entire U.S. Cuban-American population –
more than any county, city, MSA, or State (other than Florida)Source: U.S. Census Bureau
Allocating U.S.-Havana Frequencies in This ProceedingDOT Docket OST-2016-0021
Exhibit AA-R-106
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Based on the Size and Location of Cuban-American Population,
MIA Should Receive 12 U.S.-Havana Frequencies of the 20 Available
Note:1/ Daily frequencies per % of Cuban-American population were calculated based on total 20 daily frequencies to Havana for allocation multiplied by % of Cuban-American
population in each proposed U.S. gateways.2/ Excludes carriers without necessary scheduled foreign authority (Eastern and Dynamic) and requested cargo-only authority (FedEx).3/ Cuban-American population: U.S. Census (2010) - County (FL gateways), MSA (Other gateways), MSA population distribution between EWR and JFK based on theallocation described in United’s application (Exhibit UA-112).
12.2
1.2 1.20.9
0.7 0.7 0.60.4 0.3 0.3 0.3 0.3 0.2 0.2 0.2 0.1 0.1 0.1 0.0 0.00
2
4
6
8
10
12
14
MIA EWR FLL TPA LAX JFK PBI RSW MCO ORD IAH ATL IAD DFW BOS EYW JAX CLT DEN MSP
Page 1 of 1
Allocation of 20 U.S.-Havana Daily Frequencies
Based on Cuban-American Population
at Proposed U.S. Gateway Cities
A Comparison of the Frequency Allocation Based on the U.S. Gateways
P d i Thi P di ith th F i R t d t E h U S
DOT Docket OST-2016-0021Exhibit AA-R-107
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Proposed in This Proceeding with the Frequencies Requested at Each U.S.
Gateway Shows that the MIA-HAV “Asks” Were in Line with Historical Demand
15.0
2.1
13.0
4.0
2.1
3.0
2.0
1.3
4.0
0.3 0.1
1.0
0.1
1.0 1.00.7
0.3
1.0 1.0
0.3
12.2
1.2 1.20.9
0.7 0.7 0.60.4 0.3 0.3 0.3 0.3 0.2 0.2 0.2 0.1 0.1 0.1 0.0 0.00
2
4
6
8
10
12
14
16
MIA EWR FLL TPA LAX JFK PBI RSW MCO ORD IAH ATL IAD DFW BOS EYW JAX CLT DEN MSP
Total Daily Frequencies Requested by U.S. Carriersat Each Proposed U.S. Gateway
Allocation of Available 20 U.S.-Havana DailyFrequencies Based on Cuban-American Population
Page 1 of 1
Note:
1/ Daily frequencies per % of Cuban-American population were calculated based on total 20 daily frequencies to Havana for allocation multiplied by % of Cuban-Americanpopulation in each proposed U.S. gateways.2/ Excludes carriers without necessary scheduled foreign authority (Eastern and Dynamic) and requested cargo-only authority (FedEx).3/ Cuban-American population: U.S. Census (2010) - County (FL gateways), MSA (Other gateways), MSA population distribution between EWR and JFK based on the
allocation described in United’s application (Exhibit UA-112).
FLL H th L t Diff B t It P ti t Sh f U S H
DOT Docket OST-2016-0021Exhibit AA-R-108
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FLL Has the Largest Difference Between Its Proportionate Share of U.S.-Havana
Frequencies and the Number of U.S.-Havana Frequencies Requested
U.S. Gateway
All ocation of Avai lab le
20 U.S.-Havana
Daily Frequencies Based onCuban-American Population
Total Daily Frequencies
Requested by U.S. Carriers
at Each Proposed U.S.Gateway
Frequency
Difference
FLL 1.2 13 (11.8)
MCO 0.3 4 (3.7)
TPA 0.9 4 (3.1)
MIA 12.2 15 (2.8)
JFK 0.7 3 (2.3)
LAX 0.7 2.1 (1.4)
PBI 0.6 2 (1.4)
DEN 0.0 1 (1.0)
EWR 1.2 2.1 (0.9)
RSW 0.4 1.3 (0.9)
CLT 0.1 1 (0.9)
DFW 0.2 1 (0.8)
BOS 0.2 1 (0.8)
ATL 0.3 1 (0.7)
Page 1 of 1
Note:
1/ Daily frequencies per % of Cuban-American population were calculated based on total 20 daily frequencies to Havana for allocation multiplied by % of Cuban-Americanpopulation in each proposed U.S. gateways.2/ Excludes carriers without necessary scheduled foreign authority (Eastern and Dynamic) and requested cargo-only authority (FedEx). Minimum daily service proposed.3/ Cuban-American population: U.S. Census (2010) - County (FL gateways), MSA (Other gateways), MSA population distribution between EWR and JFK based on the allocation
described in United’s application (Exhibit UA-112).
Based on Percentages, MIA Has the Smallest Difference Between Its
P ti t Sh f U S H F i d th F i
DOT Docket OST-2016-0021Exhibit AA-R-109
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Proportionate Share of U.S.-Havana Frequencies and the Frequencies
Requested at MIA of Any Gateway for Which Daily Service Is Proposed
U.S. Gateway
All ocation of Avai lab le 20
U.S. -Havana Daily Frequencies
Based on Cuban-American
Population
(1)
Total Daily Frequencies
Requested by U.S. Carriers
at Each Proposed U.S. Gateway
(2)
% Difference
Between U.S.-HAV
Allocation and Request
of All Applicants
(2) ÷ (1)
MIA 12.2 (2.8) 23%
EWR 1.2 (0.9) 77%
LAX 0.7 (1.4) 202%
PBI 0.6 (1.4) 226%
RSW 0.4 (0.9) 261%
ATL 0.3 (0.7) 297%
TPA 0.9 (3.1) 329%
JFK 0.7 (2.3) 339%
DFW 0.2 (0.8) 518%
BOS 0.2 (0.8) 533%
CLT 0.1 (0.9) 872%
FLL 1.2 (11.8) 989%
MCO 0.3 (3.7) 1145%
DEN 0.0 (1.0) 1911%
Page 1 of 1
Note:1/ Daily frequencies per % of Cuban-American population were calculated based on total 20 daily frequencies to Havana for allocation multiplied by % of Cuban-Americanpopulation in each proposed U.S. gateways.2/ Excludes carriers without necessary scheduled foreign authority (Eastern and Dynamic) and requested cargo-only authority (FedEx). Minimum daily service proposed.
3/ Cuban-American population: U.S. Census (2010) - County (FL gateways), MSA (Other gateways), MSA population distribution between EWR and JFK based on theallocation described in United’s application (Exhibit UA-112).
Data Point #2: Histor ical Information on U.S.-Cuba Charter Flights
Th O h l i N b f Ch t O t d F Th U S G t
DOT Docket OST-2016-0021Exhibit AA-R-110
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The Overwhelming Number of Charter Operated From The U.S. Gateways
Proposed in This Proceeding to Cuba Originated at MIA in 2015 – Over 86%
4,348
338115 70 70 65 9 3 1 1 1 0 0 0 0 0 0 0 0 0
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
MIA TPA EYW JFK FLL MCO RSW LAX BOS MSP ATL CLT DFW DEN EWR IAD IAH JAX ORD PBI
Source: Havanatur Cuba Charter Data (2015)
age o
MIA: Almost 13x larger than next largest U.S. gateway to Cuba
2015 Charter Flights to Cuba
From U.S. Gateways Proposed in This Proceeding
By All Carriers (Including Non-Applicants)
Data Point #3: Histor ical Information on U.S.-Havana Charter Flights
Close to 84% of All Charters Between the U S and Havana in 2015
DOT Docket OST-2016-0021Exhibit AA-R-111
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2,918
26786 70 69 65 9 3 1 1 1 0 0 0 0 0 0 0 0 0
0
500
1,000
1,500
2,000
2,500
3,000
3,500
MIA TPA EYW JFK FLL MCO RSW LAX BOS MSP ATL CLT DFW DEN EWR IAD IAH JAX ORD PBI
Close to 84% of All Charters Between the U.S. and Havana in 2015
Originated At MIA
g
MIA: Almost 11x larger than next largest U.S. gateway to Cuba
Source: Havanatur Cuba Charter Data (2015)
2015 Charter Flights to Havana
From U.S. Gateways Proposed in This Proceeding
By All Carriers (Including Non-Applicants)
Allocating U.S.-Havana Frequencies in This Proceeding Based on the Number of
S C O S G
DOT Docket OST-2016-0021Exhibit AA-R-112
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U.S.-Havana Charter Flights Operated in 2015 Proportionately to Each U.S. Gateway,
MIA Should Receive 17 of the 20 Available U.S.-Havana Frequencies
g
16.7
1.5
0.5 0.4 0.4 0.40.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0-
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
MIA TPA EYW JFK FLL MCO RSW LAX BOS ATL MSP EWR PBI CLT DFW DEN ORD JAX IAD IAH
Source: Havanatur charter data (2015)Note:1/ Daily frequencies per % of 2015 charter flights operated were calculated based on total 20 daily frequencies to Havana for allocation multiplied by % of 2015 charter flights in
each proposed U.S. gateways.2/ Excludes carriers without necessary scheduled foreign authority (Eastern and Dynamic) and requested cargo-only authority (FedEx).
Allocation of 20 U.S.-Havana Daily Frequencies
Based On Charters Flown in U.S.-Havana Markets in 2015
A Comparison of the Frequency Allocation Based on 2015 Charter Flights Operated with the
F i P d t E h U S G t Sh th t MIA’ d O l MIA’ R t f
DOT Docket OST-2016-0021Exhibit AA-R-113
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16.7
1.5
0.5 0.4 0.4 0.40.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0-
2
4
6
8
10
12
14
16
MIA TPA EYW JFK FLL MCO RSW LAX BOS ATL MSP EWR PBI CLT DFW DEN ORD JAX IAD IAH
Total Daily Frequencies Requested by U.S. Carriers at Each Proposed U.S. Gateway
Al location of Avai lable 20 U.S.-Havana Daily Frequencies Based on 2015 U.S.-HAV Charter Operation
Frequencies Proposed at Each U.S. Gateway Shows that MIA’s, and Only MIA’s, Request for
HAV Service Is Less Than Its Proportionate Share of Historical Charter Flights
Source: Havanatur charter data (2015)Note:1/ Daily frequencies per % of 2015 charter flights operated were calculated based on total 20 daily frequencies to Havana for allocation multiplied by % of 2015 charter flights in
each proposed U.S. gateways.2/ Excludes carriers without necessary scheduled foreign authority (Eastern and Dynamic) and requested cargo-only authority (FedEx).
s
Several Applicants Did Not Build Realistic Connections
DOT Docket OST-2016-0021Exhibit AA-R-114
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Several Applicants Did Not Build Realistic Connections
to Their Proposed U.S.-Havana Services
Problems revealed by Direct Exhibits
General:
Applicants without Cuba experience did not augment the standard Minimum
Connecting Times (MCTs) at their gateway airports to account for the need to process
unique OFAC-required paperwork for Cuba flights to assure passenger and airline
compliance with categories of permissible travel to Cuba (American added 15 minutes to itsstandard MCTs)
Connections at proposed U.S. Gateways:
Showed insufficient connect times
Included one way connects, instead of just connects in both directions (Americandisplayed and enumerated connects only in both directions)
Displayed connecting flights beyond the customary four-hour maximum connect
window (American eliminated from its list of